PURE SUPPLY AND DEMAND

Shared by a BacktestingMax trader on 12 Sept 2026

• Profit factor: 0.07
• Win rate: 28.6%
• Trades: 7
• Backtests: 2

The strategy is based on the imbalance between buyers and sellers. Price moves away strongly from areas where institutional buying or selling has taken place. When price returns to these fresh supply or demand zones, we look for a reaction and enter in the direction of the expected move.

Entry rules

1. Identify the higher-timeframe market structure first.
2. Price must reach a fresh supply or demand zone.
3. Zone must have caused a strong impulsive move and liquidity swept
4. Avoid zones that have already been tested multiple times.
5. Trade only when the setup agrees with the higher-timeframe bias.
6. Minimum 1:3 risk-to-reward.

Invalidation

1. If price breaks and closes beyond the zone with strong displacement, the setup is invalid. Do not move the zone or force an entry. Wait for a new valid supply/demand zone to form.

Stop loss and take profit

1. Stop Loss: Place beyond the distal edge of the supply/demand zone, with a small safety buffer.
2. Take Profit: Target the next opposing supply/demand zone or major liquidity area. Minimum target should provide 1:3 R:R.

DEMO CHECKLIST

1. Daily/4H bias identified
2. Market structure confirmed
3. Fresh zone identified
4. Strong departure from zone
5. Zone has not been mitigated
6. Price returns to zone
7. Entry confirmation obtained
8. SL placed beyond zone
9. TP at opposing zone/liquidity

Inside the app

Opening this strategy in BacktestingMax shows the full record behind the numbers above, on a free account: every trade with entry, exit, size and P&L plus CSV and Excel export; a bar-by-bar replay of the author's own session on 1-minute history; Monte Carlo projections that reshuffle the trade sequence; the equity curve against buy-and-hold; advanced statistics including Sharpe and Sortino ratios, expectancy, payoff ratio, recovery factor, maximum drawdown and longest time underwater; a day-by-day P&L calendar; and behavioural analysis covering revenge trading, position-size chasing, long/short bias and the hours and days it actually made money.

Open this strategy in BacktestingMax (free account required)

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Figures come from backtests run by the author inside BacktestingMax. Past performance is not indicative of future results, and nothing here is financial advice.